1. Shari'ah Supervisory Board and its role in Islamic Financial Institution

Shari'ah Supervisory Board (SSB) is a religious board which certifies Islamic financial products are accordance with Islamic law. SSB is one of the major part of Islamic Bank and Islamic Finance. These boards have a trustful relationship and responsibility towards the stakeholders. There are 3 types of Shari'ah board International Shari'ah board, National Shari'ah board and Institutional Shari'ah board.

"A Shari'ah Supervisory Board is an independent body of specialized jurists in fiqh al-mu'amalat. It is entrusted with the duty of directing, reviewing and supervising the activities of the Islamic financial institution. The fatwas and ruling of the board shall be binding" - Definition by Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI).

At present, due to Shari'ah laws, many Islamic financial institutions are involved in product development activities with shari'ah law globally. The Fiqh al-mu'amalat experts will guide the transactions of Islamic institutions according to Shari'ah law. The major role of SSB in Islamic financial institutions are,

• Calculation of zakat payments.
• Furnishing fatwas which guarantees permissible financial products.
• Giving advise to the banks for the disbursement of income to shareholders and debenture holders.
• Act as a guide to the islamic banks for its wider social role in the country.
• Establishing Shari'ah audit to check the products are accordance with Shari'ah guidelines.
• Eliminating income from non Shari'ah compliant.

The Kingdom of Bahrain is promoting itself as international hub for Islamic finance. Bahrain is the main source of many Islamic organisations like AAOIFI, Liquidity Management Centre (LMC), International Islamic Financial Market (IIFM),Council for Islamic Banks and Financial Institutions (CIBAFI) and Islamic International Rating Agency (IIRA). In Bahrain, three Islamic prominent scholars provide the bank with Islamic opinions. They are Sheikh Doctor Nedham Yaqoobi (Chairman), Sheikh Doctor Osama Bahar (Member) and Sheikh Abdul Nasser Al Mahmood (Member).

2. Four Models of Governance

Upon building of an organisation, there is a need of advice, direction and a few hands to tie up. These works are jointly done by the board of governance models. These board of governance was widely used by non-profit organisations. There are four models of governance. They are Advisory model, Cooperative model, Management team model and Policy board model.

1. Advisory Model - It is the traditional style of non-profitary model of governance. Advisory board model members have little power in decision making, but they have more priority over the CEO of the company. This model is made from industry luminaries who are able to give professional skills more network of connection in non-profit areas. These organisations earns from their skills, advertising and connections.
2. Cooperative Model - The cooperative board model is uncommon in many non-profit organisations. In this board, all members are equal and they have equal decision making power. This model is democratic in nature. Cooperative boards acts on the decisions made by proper voting procedures and needs every members to work for organisation's goal.
3. Management Team Model - It is the most popular model used by many small and medium sized non-profit organisations. The management team takes a lot of notes from the cooperate syle and structure. This board was divided into department esque committees. These committees are responsible for human resource organisation, fund raising, marketing and event planning. This type of splitting makes the members to focus on particular area and make decisions.
4. Policy Board Model - In this model, the board permits most of its authority and power to the CEO, making them have full control on organisation. After this, the board becomes a 'second-in-command' of company with the CEO in the top position. The CEO is responsible for making all important decisions relating to the organisation.

Nowadays, a growing concern is emerging for Islamic principle of corporate governance. The main ethical component in Islamic rule is to provide equality, fairness, justice, honest and make every parties with their rights and dues. The dimension of Islamic perspective on the governance is very broad and it cannot be able to categorize the roles of governance according to Islamic Shari'ah rules. On the other hand, more researches have been carried in countries where Islamic finance is playing a major role in the economy. This research study explains the plurality in Shari'ah governance practice in countries provides innovation of credibility and uniformity in the country governance.

3. Challenges and Solutions for Shari'ah scholars holding too many Board Positions

Challenges :

• One of the main challenges faced by Islamic financial industry is the shortage of qualified Shari'ah scholars and the same Shari'ah scholars are only occupying the industry. The other scholars and experts are not given a chance to hold the position on board.
• There are also problems with educational qualification and effective training in dealing with the modern economy.
• Once the scholars occupied the position on board, the other members are not entitled to have giving decisions regarding the board.
• The decisions and judgements are depend on only Shari'ah scholars. The rules and regulations of the board and organisation are made by the Shari'ah scholars only.

Solutions :

• The solution for this problem is having more scholars and experts apart from Islamic Shari'ah rules have been appointed in the board. Some economic scholars, financial scholars also guides the organisation in a good way.
• Other scholars and top level managers in the board also given decision making authority upon the board and organisation.
• Training should be given to small employees.
• The government should give an opportunity to the persons other than Shari'ah scholars to appoint in the board of members.